1. Application for rectification of a tribunal order that invalidated a show-cause notice based on the mention of an inapplicable provision of law. (Para 2 )
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1996 Supreme(SC) 154
SUPREME COURT OF INDIA
B.N.Kirpal : J.S.Verma
Collector Of Central Excise, Calcutta
Versus
Pradyumna Steel Limited
Case No. : .
Date of Decision : 1/19/96
Important Points
The mere mention of an incorrect provision of law in a show-cause notice does not invalidate the exercise of power, provided that the power being exercised is available under a different provision of law.
Subject
Tax Law - Central Excise
Act Referred
Headnote
(A) Central Excise Law - Rectification of Order - Validity of show-cause notice - Mere mention of an incorrect provision of law in a show-cause notice is not sufficient to invalidate the exercise of power, provided the power is available under a different provision - Such a finding constitutes an error apparent on the face of the record. (Para 3)
Facts of the case:
An application for rectification was filed by the Department against a tribunal order which had held a show-cause notice invalid on the ground that the provision of law mentioned therein was inapplicable. The tribunal rejected the application for rectification, maintaining that the incorrect provision invalidated the notice, leading to the present appeal.
Findings of Court:
The tribunal's rejection of the rectification application was contrary to law. It is settled that the mention of a wrong provision does not invalidate the exercise of power if such power is available under another provision.
Issues: Whether the mention of an incorrect provision of law in a show-cause notice is sufficient to invalidate the notice and the subsequent exercise of power.
Ratio Decidendi: The court held that if the power exercised is available even under a different provision, the mere mention of a wrong provision of law in the show-cause notice is by itself not sufficient to invalidate the exercise of that power.
Result: Appeal disposed of; impugned order set aside and application for rectification allowed.
Facts of the case:
An application for rectification was filed by the Department against a tribunal order which had held a show-cause notice invalid on the ground that the provision of law mentioned therein was inapplicable. The tribunal rejected the application for rectification, maintaining that the incorrect provision invalidated the notice, leading to the present appeal.
Findings of Court:
The tribunal's rejection of the rectification application was contrary to law. It is settled that the mention of a wrong provision does not invalidate the exercise of power if such power is available under another provision.
Issues: Whether the mention of an incorrect provision of law in a show-cause notice is sufficient to invalidate the notice and the subsequent exercise of power.
Ratio Decidendi: The court held that if the power exercised is available even under a different provision, the mere mention of a wrong provision of law in the show-cause notice is by itself not sufficient to invalidate the exercise of that power.
Result: Appeal disposed of; impugned order set aside and application for rectification allowed.
Legal Category Hierarchy
Table of Contents
2. Whether the mention of an incorrect provision of law in a show-cause notice is sufficient to invalidate the exercise of power. (Para 2 )
3. The tribunal's rejection of the rectification application was contrary to law as there was a clear error apparent on the face of the order. (Para 3 )
4. Mere mention of a wrong provision of law does not invalidate the exercise of power if such power is available under a different provision. (Para 3 )
5. Order rejecting the rectification application set aside; rectification application allowed; main order set aside; tribunal directed to decide appeal afresh on merits. (Para 4 )
6. Does mentioning an incorrect provision of law in a show-cause notice automatically invalidate the notice?
No, the mere mention of a wrong provision of law is not sufficient to invalidate the exercise of power, provided that the power exercised is available even if under a different provision. (Para 3 )
7. What constitutes an error apparent on the face of a tribunal's order regarding the validity of a notice?
An error apparent on the face of the record occurs when a tribunal invalidates a notice solely because an incorrect provision of law was mentioned, despite the power being available under another provision. (Para 3 )
8. What is the consequence of a court finding an error apparent on the face of a tribunal's order rejecting a rectification application?
The order rejecting the rectification application is set aside, the application for rectification is allowed, and the original order being rectified is set aside, requiring the tribunal to decide the matter afresh on merits. (Para 4 )
(1) LEAVE granted.
(2) AN application for rectification was made by the Department to the tribunal for rectification of its order dated 23/6/1987 deciding the appeal. In the main order, the only relevant part is contained in para 4 thereof, with which alone the other member of the bench expressed his concurrence. In that part of the order, it was held that the provision mentioned in the show-cause notice being inapplicable, the show cause notice was invalid and the correct provision to show-cause could not be seen to support the validity of the notice. The application for rectification made by the Department was on the ground that the mere mention of an incorrect provision of law in the show cause notice was not sufficient to invalidate the same and a decision was relied on in support of this proposition to make out the ground of an error apparent on the face of the order. This application has been rejected by the tribunal. Hence, this appeal by special leave.
(3) IT is settled that mere mention of a wrong provision of law when the power exercised is available even though under a different provision, is by itself not sufficient to invalidate the exercise of that power. Thus, there is a clear error apparent on the face of the tribunals order dated 23/6/1987. Rejection of the application for rectification by the tribunal was, therefore, contrary to law.
(4) THE impugned order of the tribunal dated 21/12/1989 rejecting the Departments application is, therefore, set aside. This results in the Departments application for rectification being allowed, with the consequence that the main order dated 23/6/1987 passed by the tribunal is also set aside. The tribunal would now proceed to decide the appeal afresh on merits.
(5) THE appeal is disposed of. No costs.
